Monday, December 19, 2011

Finance Min Pranab
Mukherjee has said headline inflation in the country remains perilously
close to double digits but is expected to moderate to 6-7 pc by March if
the present declining trend continues.

"So
far as inflation is concerned, yes, I do agree headline inflation is
still high, perilously close to double-digit inflation," Mukherjee said
at a press conference in Bangalore on Sunday after meeting with the
chief ministers of southern states and the CEOs of public sector banks
based in the South.

"I do hope if this trend continues, then the year-end inflation... by March will be 6-7 per cent," he said.

However,
he highlighted that though overall inflation is high in the
manufacturing sector, fuel and certain other commodities, food inflation
has come down.

Food inflation fell sharply to a four-year low of 4.35 percent in the week ended 3rd
December from 6.6 percent in the previous week, while headline
inflation moderated to 9.1 percent in November from 9.7 percent in the
previous month.

Talking
about the global slowdown, Mukherjee said, "It's true that we are going
through difficult times, not only in India, but also all over the
world."

As
per the latest assessment, there is no possibility of a recovery in the
euro zone -- comprising 28 countries of the European Union -- till the
third quarter of the next calendar year (2012), he said.

Mukherjee
said as per another assessment, there has been slow recovery in the US
economy, but how long it will continue and how far it is, is yet to be
seen.

"The
same is the story with Japan," he said, adding that the growth rate in
many emerging economies has come down and the rate of inflation is also
high in these countries.

"In that context, we are also facing problems," Mukherjee said.

India's
GDP growth rate stood at 7.7 percent in the first quarter of 2011-12.
However, it slowed to 6.9 percent in the second quarter, the slowest
pace of expansion in nine quarters.

Addressing
the chief ministers and bankers, the Finance Minister said agriculture
credit flow was an important item on the agenda for their meeting today.

For
the current financial year, the target for agriculture credit flow has
been fixed at Rs 4,75,000 crore, against which the banking system has
already extended credit of Rs 2,23,380 crore as of 30th September 2011, he said.

In the case of South Zone states, the figure is Rs 20,622 crore, he added.

"I
have requested states to make efforts to generate awareness regarding
the Short Term Crop Loans Scheme, where credit is available at an
attractive interest rate of 4 per cent per annum for prompt repaying
farmers so that the farmers can avail credit at cheaper rates," he said.

Mukherjee
also reviewed the credit flow to minority communities in the South
Zone. The total outstanding has increased one-and-a-half times in the
last three years ending March, 2011.

The
Finance Minister said fourteen large projects with a total investment
of Rs 39,424 crore are pending for want of various approvals in the
southern region.

"I
have requested the Chief Ministers to pay personal attention to this
aspect and review the status of approvals in large projects in their
states. I have advised the CMDs of the PSBs to approach the state
governments for expediting the approvals in projects financed by them,"
he said.